German business sentiment improves slightly in April - Ifo

German business sentiment improved slightly in April, according to a survey released on Monday by the Ifo Institute.

The business climate index rose to 93.6 from 93.2 in March, although this was a touch weaker than expectations for a reading of 94.0.

Meanwhile, the expectations index ticked up to 92.2 in April from 91.0 the month before, and the current situation index printed at 95.0, down from 95.4.

The manufacturing index rose to 6.7 in April from 6.5 in March, while the service sector gauge fell to 6.8 from 8.8. The index for trade deteriorated to -10.7 from -10.1 and the gauge for the construction sector came in at -17.6 versus -17.5.

Ifo Institute president Clemens Fuest said: "German business’s worries are abating, but the economy is still lacking dynamism.”

Franziska Palmas, senior Europe economist at Capital Economics, said: "Overall, the Ifo remained more downbeat than other surveys. While the Composite PMI is now consistent with a decent expansion in GDP, both the Ifo expectations and current condition indices still point to contractions."

She said "the Ifo is a reminder that the German economy is still facing substantial headwinds from rising interest rates and depressed household incomes".

"We still expect the economy to remain weak in the next few months."